Bharti raises funds to buy Zain's African biz

The move post-acquisition would make Bharti Airtel the world's fifth-largest mobile telecom firm with operations across 18 countries.

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Mail Today Bureau

New Delhi

May 28, 2010

UPDATED: May 28, 2010 10:41 IST

India's leading telecom operator Bharti Airtel has begun raising funds to finalise its Rs 48,150 crore ($10.7 billion) deal with Kuwait's Zain Telecom to acquire its African assets, the largest overseas acquisition of assets in Africa by any Indian company.

"Further to our announcement dated March 30, 2010, regarding the proposed acquisition of Zain Africa BV, Bharti Airtel has initiated the funds drawdown for the completion of the said transaction," the company said on Thursday. Bharti's deal with Zain was its third attempt to enter the largely untapped African market after failing to enter into a merger pact with South Africa's MTN on two occasions.

The move post-acquisition would make Bharti Airtel the world's fifth-largest mobile telecom firm with operations across 18 countries. However, it will remain behind only to a select telecom companies that includes China Mobile and Vodafone.

It will also gallop ahead of other giants such as China Unicom, Sweden's TeliaSonera, and Germany's Tmobile.

According to the telecom industry experts, the challenge for Bharti lies in raising revenues and adding subscribers with limited resource availability as Zain has been losing both in some of the countries.

For Bharti Airtel, the Zain's acquisition is the largest overseas acquisition of assets in Africa by an Indian company despite the fact that it would not cover the assets of Zain in Sudan and Morocco.

Its total customer base is expected to touch over 180 million, including Zain Africa's mobile operations in 15 countries with over 42 million customers, including its operations in India, Sri Lanka and Bangladesh. Africa accounts a little over 60 per cent of Zain's 71.8 million customers. In India, it has over 30.16 per cent of the market share with over 130.6 mn customers.

According to experts, the challenge for Bharti lies in raising revenues and adding subscribers with limited resource availability as Zain has been losing both in some of the countries.

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